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23 May, 2025
 
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U.S. to EU: Drop your tariffs or face new trade war, Financial Times reports

Washington demands one-sided concessions as talks stall, warning Brussels of looming 20% duties unless it gives in.

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In a stark escalation of trade tensions, the United States is pressing the European Union to drop tariffs on American goods without expecting the same in return or face a new wave of steep US duties, the Financial Times reports.

Washington's trade negotiators, acting under former President Donald Trump's legacy trade agenda, have warned that unless Brussels makes unilateral concessions, talks aimed at avoiding an extra 20% in tariffs will stall. According to insiders, US Trade Representative Jamieson Greer plans to tell EU counterpart Maros Sefcovic that a recent EU proposal falls far short of American expectations.

At the heart of the standoff is the EU’s reluctance to lower its tariffs independently, something other countries have done to appease the US. Brussels instead proposed mutual reductions and notably left its controversial digital tax policy off the negotiation table, which the US had flagged as a must-discuss item.

Both sides are currently exchanging documents, but insiders told the Financial Times there's been little real progress. “Exchanging letters is not real progress,” said one source. “We are still not really getting anywhere.”

The upcoming meeting between Greer and Sefcovic in Paris could be a make-or-break moment. The US wants the EU to help shrink its massive €192 billion trade deficit and is dangling the threat of wider tariffs on European goods like pharmaceuticals and semiconductors. Currently, it’s already slapping a 25% duty on steel and aluminum and has a 20% rate on most EU goods, temporarily halved until July 8 to allow talks to continue.

The EU, for its part, insists it's willing to negotiate fairly. It has floated ideas like recognizing each other’s standards, easing trade in food and animals, and making sure imports meet labor and environmental rules. Still, trade officials in Europe remain wary of what they see as Washington's go-it-alone approach.

Meanwhile, the EU has suspended tariffs on €23 billion worth of American products during the talks but is readying a retaliation list covering €95 billion more, including Boeing planes and bourbon whiskey, if talks fail.

As trade diplomats brace for the next round, the mood is cautious. Some worry that even if a deal is reached, the US will lock in a 10% tariff baseline, which many in Europe view as unacceptable. For now, both sides say they want a “fair and balanced” outcome, but the clock is ticking.

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Cyprus  |  Europe  |  USA  |  economy  |  trade

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